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TSMC said to be considering first European semiconductor plant

Taiwanese company won't rule it out amid reports execs are visiting Dresden, Germany

TSMC told The Reg it has no "plans at this time" to site one of its factories in Europe but wouldn't rule anything out amid reports that the world's most strategically important chipmaker was sending senior suits to Dresden, Germany, to discuss the possibility of a factory there.

Its comments come weeks after German business magazine Capital reported a TSMC delegation had already traveled to Saxony to discuss the possibility of building a fab there in October.

The FT this morning claimed an additional delegation would arrive next year to make a "final decision" on whether to spend billions on a plant expected to begin construction by "as early as 2024." The paper quoted (paywall) an executive from a supplier that would provide key materials to the proposed Dresden plant as saying: "We would try to support our customers. We wouldn't let [them] walk alone in the desert." The source told the paper that support from the state would be required.

In June, TSMC chairman Mark Liu said the giant had no "concrete plans" for fabs in the continent as it had "relatively fewer customers" there.

Until very recently, the contract manufacturer produced semiconductors almost exclusively in its home country of Taiwan and neighboring China, where it makes chips for customers including Apple, Nvidia and AMD.

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It also has a facility in Singapore in the form of SSMC, an 8-inch wafer fab which is a joint venture with Dutch company NXP Semiconductors, and a 200mm fab in Washington in the US in the form of its wholly owned US subsidiary, pure-play semiconductor foundry Wafertech.

Earlier this month, the company announced that it will more than triple its planned investment in not one but two new Arizona facilities to $40 billion – a 4nm silicon wafer fab set to go into production in 2024, and a 3nm one slated for 2026. Meanwhile, in  Japan, TSMC is building a new factory with Sony that will fabricate chips using the older 22 and 28nm nodes.

Its lead in advanced process nodes provide something of a silicon shield against any Chinese incursions – as its former CTO has pointed out – but it needs to maintain a good relationship with its neighbor, where subsidiary TSMC China is situated, and which is a consumer of at least some of its semis.

The US position on China trade – in the form of multiple chip sanctions as well as trade bans on allowing US tech anywhere near its products – appears to have put the foundry giant in a bit of a pickle.

CEO CC Wei recently spoke at an event where he claimed "geopolitical confrontation has distorted the entire market."

He told a recent industry event that: "Previously, you make a product and could sell it to the whole world. Now, some products are not allowed to be sold, some countries say that you are not allowed to enter, while some say you can only use certain [local] products."

A TSMC plant in the EU would be a boon for Germany, which already has an Intel plant planned in Magdeburg. But the chip giant is said to be delaying construction in order to seek further public subsidies for the project, citing increased costs as one reason for the rethink.

The EU – like the rest of the world – is trying to cut its reliance on importing semiconductors from Asia and earlier this year approved €43 billion ($44.8 billion) in subsidies under the European Chips Act to lure chipmakers to Europe, with a target of doubling the current market share of the EU to about 20 percent of global semiconductor production by 2030. TSMC could also look for additional subsidies from the German state itself. The FT's report claims TSMC's meetings with materials and equipment suppliers are "focused on whether they can also make the investments required to support the plant."

TSMC told The Register in a statement: "Our global manufacturing expansion strategy is based on customers' needs, business opportunities, operating efficiency and cost economic considerations. While we do not rule out any possibilities, we have no plans at this time." ®

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